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solo 401k for moonlighting

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  • solo 401k for moonlighting

    I’m starting my first job out of fellowship in the fall at an academic hospital. I regrettably have ignored financial planning until now and am trying hard to get up to speed and save aggressively for retirement.  I'm SO glad I found WCI!

    I have some questions about whether I can and/or should open a solo 401k.   Here's my situation:

    • I will have a 403b with employer match, 457b with employer match, an HSA.  I plan to max all of these out (18k+18k+3.4k).

    • Also plan do the backdoor Roth IRA, so I will open traditional and Roth IRA’s.

    • I’ve done a small amount of moonlighting during fellowship and will continue this as an attending. It’s about 10k/year of 1099 income.

    • For reference, I’m not married and have no dependents.


    Here are my questions:

    1. Am I allowed to open a solo 401k if I also have an IRA? I think the answer is yes, but want to make sure.  The IRA is just for backdoor Roth purposes so it will be empty 365 days of the year.

    2. If I put 18k into my 403b, then the only money I can put in the solo 401k is my 20% employer match on my moonlighting income, right?

    3. Is it worth opening a solo 401k for only ~2k?

    4. Is there anything else I can do to get more money in retirement accounts?


    Thank you so much for any advice and clarification you can offer!

  • #2
    1. Yes

    2. Yes

    3. Yes.  You will have it ready to go if you ever switch jobs and need to roll into it.

    4. Even if you could, I would submit you are doing enough.  Start taxable investing as it will offer you much flexibility.

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    • #3


      Am I allowed to open a solo 401k if I also have an IRA? I think the answer is yes, but want to make sure.  The IRA is just for backdoor Roth purposes so it will be empty 365 days of the year. If I put 18k into my 403b, then the only money I can put in the solo 401k is my 20% employer match on my moonlighting income, right? Is it worth opening a solo 401k for only ~2k? Is there anything else I can do to get more money in retirement accounts?
      Click to expand...


      #2 - note that the contribution is based on the net profits from your IC income, not the gross (what you earn).

      #3 - the best use of your solo k in the beginning will not be for extra savings, but to serve as a receptacle if/after you leave your new job.

      #4 - retirement planning does not involve only tax-blessed "retirement" accounts. As Dr. Mom said, you should also include a taxable account in your portfolio for many reasons. Flexibility is and preferential tax rates are 2 of those reasons.
      Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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